Monday, March 29, 2010

Small Chance for South Africa to Break Even on World Cup Investment

South Africa has very slim chances of breaking even on its investment in the World Cup, according to a report from Human Sciences Research Council executive director of the Centre for Service Delivery research programme Dr Udesh Pillay. The best-case scenario would see a modest 0.5% increase to the country's GDP. But large defecits are expected to occur.

The country's expenditure on the event has been R63-billion ($8.5 billion USD), which is 6,4% of the 2010/11 gross domestic product (GDP). Currently, the only known revenue is R2-billion ($270 million USD) from FIFA and it is estimated that the event's contribution to the GDP will be 0,5%.

Taking these figures into account, Pillay says that the best-case scenario deficit that South Africa will experience is R26,1-billion ($3.5 billion USD), while the worst-case scenario deficit will be R56,1-billion ($7.5 billion USD). But these figures do not take ticket sales, marketing and merchandising into account.

He estimates that ticket sales, marketing and merchandising could add up to a total of about R20-billion, therefore it could be possible to break even in a best-case scenario, but there is a current possible conundrum. There are a total of 3,2-million tickets available for the event. To date, local supporters have bought about 350 000 tickets, or 11%, of these, resulting in 2,8-million remaining tickets.

SA may just break even on 2010 World Cup, research shows
Engineering News
March 19, 2010